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Situational analysis is one of the major requirements for a business process. For an effective situational analysis SWOT analysis is the tool which helps the manager to understand the company’s strength and weaknesses as well as the prospective opportunities and threats for the firm.
Figure 1: Effectiveness of analysis tools (Source: Ferrell, Hartline, 2008, p. 119) Of the four elements of the SWOT analysis Strength is the most effective element which is needed to be evaluated by the company. Identifying the strength of the firm gives better understanding of the market scenario in accordance to the company’s position. With more strong position in the market the company will be able to minimize its weaknesses in the market. Also SWOT analysis facilitates the company to find new opportunities in the field which shows stronger position for the company. As for example if a company has strong financial condition it’s a good opportunity for the firm to invest into expansion strategy as the strategic plan. When a company has good understanding of its strength and weaknesses the company will also be able to cater with the threats which might arise in the business process. But conducting a SWOT analysis is not an easy task for the organization. Several issues might arise in the process. ...
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